Olympus Partners To Buy NPC International

NPC International Inc., the nation's largest Pizza Hut franchisee, said Monday it has agreed to a sale to private-equity firm Olympus Partners.

Terms of the deal were not disclosed, but sources told Bloomberg in September that major shareholder Bank of America was seeking $800 million. Stamford, Conn.-based Olympus said Monday it would not comment until after the deal is completed, which NPC said was expected before the end of the year.

Overland Park, Kan.-based NPC and its parent company, NPC Acquisition Holdings Inc., said in a statement that the acquisition is expected to be financed, in part, by a senior credit facility to be arranged through Barclays Capital and Goldman, Sachs & Co.

NPC, which operates 1,153 Pizza Huts in 28 states, also on Monday reported essentially flat year-over-year net income of $3.5 million for the third quarter, which ended Sept. 27. Revenue rose slightly to $237.9 million from $237.2 million in the prior-year quarter. Same-store sales increased 0.4 percent, rolling over a 10.9 percent increase in the third quarter last year.

"During the third quarter our comparable-store sales strengthened from the first half of the year returning to positive territory despite rolling over very strong comparable-store sales growth from the prior year," Jim Schwartz, NPC's president and chief executive, said in a statement.

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As of the third quarter, NPC said its operations represented 19 percent of the domestic system for Pizza Hut, which is a division of Louisville, Ky.-based Yum! Brands Inc.

The pizza franchisee said it has "promoted strong value focused on our lower cost carry-out channel with our $10 Any Carry-Out Pizza promotion, coupled with the re-introduction of the $5 P'Zone which resonated well with consumers during these challenging economic times."

During the quarter, NPC opened 13 new delivery-carry-out units, boosting new-store development for the year by 17 locations.

NPC did not address the Olympus Partners deal in releasing the third-quarter earnings. Bank of America had acquired its interest in NPC in the 2009 takeover of Merrill Lynch & Co., which had paid $615 million for the pizza franchisee in May 2006.

NPC in its year-end 2010 filings said it owned the land or the buildings for 19 of its restaurants and leased the land or buildings for 1,117 restaurants.

Olympus Partners manages more than $3 billion in investments in such sectors as healthcare services, financial services, consumer products and business services.

Olympus' foodservice-related investments, according to its website, include: Ann's House of Nuts; K-Mac Enterprises Inc. of Fort Smith, Ark., which franchises 140 Taco Bell and KFC restaurants in Arkansas, Missouri, Oklahoma and Texas and Golden Corrals in Arkansas and Missouri; Pennant Foods Corp of Knoxville, Tenn., which franchises 89 Wendy's in Southern California and Eastern Tennessee; Pepper Dining of Charlotte, N.C., which franchises more than 90 Chili's Grill & Bars in the Northeast and Mid-Atlantic.

Contact Ron Ruggless at ronald.ruggless@penton.com.
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